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Financial Ratios2!

This topic has 3 replies, 2 voices, and was last updated 11 years ago by John Moffat.

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September 2, 2014 at 9:06 am #193275
Shams
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- Topics: 16
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Questions)
You are given the following information about the shares of Trunk.
Cover: 2.4
Yield: 3.0%
Market Price: $1.80
What is the P/E ratio for the company? The price earnings ratio can be derived from share price/earnings per share. Earnings per share can be derived from: Net profits/ (loss) attributable to ordinary shares.
I would appreciate some explanation on this as well. Thanks, Shams
September 2, 2014 at 9:22 am #193279
John Moffat
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The dividend yield is: dividend/market price.
So the dividend per share = 3% x $1.80 = $0.054
Dividend cover is: earnings per share/dividend per share
So the earning per share = 2.4 x $0.054 = $0.1296
PE ratio is: market value / earning per share = 1.80 / 0.1296 = 13.89
September 2, 2014 at 9:48 am #193283
Shams
Member
- Topics: 16
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Thank you Mr. Moffat. It is greatly appreciated.
September 2, 2014 at 2:46 pm #193322
John Moffat
Keymaster
- Topics: 57
- Replies: 54786
You are welcome 🙂
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